Congressional leaders and the White House continue to negotiate around a multi-faceted “reconciliation” bill with policy implications for tax structures, energy policy, border security, federal program funding, Medicaid, and “food stamps” eligibility, and state/local autonomy. The oft-stated goal is a bill signed by July 4, but negotiations have been fragile. Here’s a roundup of the latest.

Tracking federal legislation is often more complex than state-level legislation – where Maryland’s General Assembly has a relatively easy to understand path toward passage, the US Congress has a more complicated network of committee jurisdictions, procedural rules, and annual scheduling that constitute a non-linear path toward becoming law for even the simplest bills introduced. An enormous, complex, and consequential bill such as the omnibus One Big Beautiful Bill Act (H.R. 1 from the House of Representatives, since passed and now in the US Senate) compounds this process even further.

Here, we will analyze the status of the BBB and assess its components that are making a final compromise feel elusive.

Timetable

Nominally, the Congress does not need to act on this bill. However, multiple items in the bill either extend or reframe provisions from the 2017 Tax Cuts and Jobs Act that are scheduled to expire. The early expiration of numerous tax cuts in that bill was a by-product of the Congressional tradition of “scoring” fiscal effects as an aggregate over 10 years. Designating a 7-year expiration on certain costly provisions brought that bill’s score within a range deemed acceptable by certain key legislators whose support was essential. So, no action this year on any of those elements means numerous tax cuts would expire.

The President, whose phrasing became the official title of the House-passed bill, has expressed his desire to sign a final bill by Independence Day, July 4. From an article in Fortune, President Trump has declared an ultimatum on timing:

President Donald Trump says “NO ONE GOES ON VACATION” until the big, beautiful bill is on his desk by the Fourth of July deadline. And Republicans in Congress are staying put to get it done.

The Senate is gearing up for weekend work, while House Speaker Mike Johnson told lawmakers Tuesday to keep their schedules “flexible” as they prepare for more votes.

The Fortune article also lists the major provisions of the bill. Some indications suggest that the Senate may even alter the title of the bill.

Momentum Fading?

As the Senate deliberates on the various aspects of the bill, popular opinion appears to have shifted negatively towards the package. From NBC News:

President Donald Trump is facing political headwinds for his “big, beautiful bill” as Republican leaders hope to begin votes on it in the Senate this week.

Specifically, a raft of new surveys indicate that the GOP is losing the battle of public opinion on a major piece of legislation they’re aiming to pass by July 4.

Holdups: Tax Changes

With such sweeping legislation, it is unpredictable which specific facets may become a yes/no pivot for individual votes in the two chambers. The specifics over extending the State and Local Tax income tax deduction (currently capped at $10,000, but proposed to move to $40,000 in the House-passed bill) have brough numerous individual legislators to the point of opposing the bill without their desired result — on both sides (i.e. raise the cap vs. retain the cap) of that issue.

The overall tax policy, again in many facets, has triggered differential responses among stakeholders, especially after the House-passed bill became available for more thorough analysis. See this summary from the Tax Foundation, generally viewed as a low-taxation advocate, on the bill:

Senate Republicans have advanced legislation to extend many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) alongside dozens of new provisions, following broadly similar legislation put forward by House Republicans. Any comprehensive tax legislation is going to have its wrinkles, and the “One, Big, Beautiful Bill” is no different. We have previously published estimates of the budgetary, economic, and distributional effects of the House legislation and the Senate legislation, and this post will dive into the good, the bad, and the ugly of the Senate’s.

Their analysis goes on to chide the bill for its “gimmicks and carveouts,” and describes some features as a “maze.” Their lengthy full analysis is available online.

News reports also tally vocal concerns about a variety of other tax provisions in the bill, as well as numerous differences between the emerging Senate work product and the House’s version. A compromise, with both chambers passing the same bill in the end, is required to send it to the President, with very narrow Republican majorities in both chambers, that creates a razor-thin alley needing near-consensus among the majority party.

Holdups: Policy Changes

In addition to the tax provisions, the bill embeds some policy matters that are consequential. Among them is a preemption of state and local governments from enacting any restrictions on companies using artificial intelligence or automation for the next 10 years.

An opinion piece on Fox News offers this context for the AI ban, citing the influence of large technology companies on the federal policy-making process:

But some states are stepping up. Lawmakers in both parties have introduced bills to locally regulate AI surveillance, driverless vehicles, and workplace automation. And that’s precisely why Big Tech wants to nuke states’ rights to regulation as quickly as possible.

Some outlets suggest that this matter is divisive within the Republican majority: MAGA is split over the AI provision in Trump’s Big Beautiful Bill, with individual House members indicating regret for supporting the bill with that provision included.

Senate Majority Leader has apparently sensed this apprehension, indicating a “light touch” may be required with those elements of a final bill, to protect its passage.

Again, with virtually every Republican member of the Senate and House possessing near-veto power (because virtually every vote is needed for its passage), the negotiations ahead are extraordinarily delicate.

Scaling Back?

Some indications are that the Senate’s path toward passage must include withdrawing provisions from the House bill. An article in USA Today details the process of conforming the bill to Senate rules for a “reconciliation bill” that bypasses that body’s typical rules for floor debate (notably the filibuster tactic that effectively means passage required 60 votes) and instead places the legislation onto the floor for a single up-or-down majority vote.

Gone are GOP-led efforts to curb environmental regulations, attempts to restrict federal judges’ powers, plans to bulk up immigration enforcement and to cut funding from the federal agency launched to protect American consumers after the 2008 financial crisis. MacDonough determined each item was in violation of a critical Senate rule that prohibit extraneous measures in bills like the one Trump wants on his desk for signature by July 4.

So, through a combination of rule-execution and political realignment, the omnibus bill may shrink its reach.

The consequences of this are far-reaching, though, because most legislation requires a 60-vote supermajority in the Senate, the US Congress has found itself unable to pass routine legislation, for the most part. So, if the bill’s provisions on environmental regulations (as an example) come out of this bill, the likelihood of a new stand-alone bill with those provisions alone passing is very low. Most major Congressional action, in modern times, is conducted through multi-pronged “must-pass” bills like the pending one.

Maryland Effects

As covered on Conduit Street, the passage of the bill in any of its possible forms will surely have major policy and fiscal implications for Maryland. Among them:

• Pass-through effects of income tax changes, since the State and county income tax structures draw from taxpayers’ federal returns as a basis for local calculations (to a degree)
• Changes to Medicaid could alter eligibility and coverage for Marylanders, leaving a State-level policy conundrum on whether to backfill coverage, subsidize Marylanders for private coverage, or accommodate many more residents without health insurance
• Effects on Maryland’s workforce due to changes in funding for federal agencies, with Maryland widely noted as the most directly affected State in the USA by such federal actions

Keep Watch, Fast Moving

Most onlookers expect the working deadline to remain in effect, and the rapid evolution toward a compromise bill to continue in the days ahead.

The National Association of Counties has offered dedicated coverage on county effects of the sweeping bill. Their coverage will continue as final actions take place.

NACo advocacy page  
NACo Twitter/X page

And, of course, continue to follow Conduit Street for updates and analysis of, potentially, the most consequential federal action in memory.